How much is that doggie in the window?

Written By: - Date published: 3:04 pm, May 26th, 2009 - 22 comments
Categories: supercity - Tags: ,

It’s a disgrace that the supercity agenda is being foisted on Auckland undemocratically, and it is an additional disgrace that it is being bulldozed through uncosted. The government cannot tell Aucklanders what this reorganisation is going to cost them on their rates bills – though some estimates put it at over $550 each. Whatever happened to “no taxation without representation”? Whatever happened to National’s concerns about uncosted proposals before the election? How times change.

Here’s one significant cost that may well have been underestimated so far – the costs of integrating the disparate information systems of the current councils:

Merging council IT systems to create an Auckland “supercity” will cost the best part of $200 million and could take eight years to complete, according to consultancy firm Deloitte.

…

Mr Hitch says Deloitte has investigated the likely costs and timeframe of the IT systems merger. Others’ assumptions about the size and complexity of the task are simplistic, he says. “It’s going to take about four to eight years. If you look at large complex mergers, such as the Fonterra merger – they merged a long time ago and they’re still slowly rolling different parts of the business on to other parts of systems. This is going to take at least that long.” Mr Hitch says there are about 300 IT staff across the eight councils and this number could increase as the merger progresses.

Later in the piece a Microsoft manager tries to put the counter argument – “There will be costs associated with integration. But over time you’ll reduce the total costs associated with running 17 systems. You need to look at the picture in two to three years time” – but this underestimates the four to eight year time scale described by Deloitte. Aucklanders will be paying for this for a long time before they see benefits, if any, and the government is at the very least negligent in being unable to say what the reorganisation is going to cost ratepayers.

22 comments on “How much is that doggie in the window? ”

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  1. Rex Widerstrom 1
    26 May 2009 at 3:12 pm

    Okay I’ve never been involved with an integration this big but I was around when the Dom went from manual typewriters and hot lead to Atex; I was involved with the marketing side of things when the TAB rolled out its sports betting; I’ve seen a fair few other major IT projects happen and I’ve carried out smaller ones myself.

    $200 million and eight years? Who’re they getting in to run it? Barry Matthews?!?

    • r0b 1.1
      26 May 2009 at 3:18 pm

      Who’re they getting in to run it?

      Hopefully not the crew who brought us INCIS. As we’ve already seen in NZ, these things can go horribly and expensively wrong.

      • Rex Widerstrom 1.1.1
        26 May 2009 at 3:32 pm

        Hence my mention of Barry Matthews. Only with such a degree of inept Keystone Kops mismanagement could I foresee the integration of council IT systems (rates, parking fines, HR, building permits, minutes… none of which are that complex) taking eight years.

        In fact they’d have to clone the man to have it take that long and cost that much. I’m with infused – I’d think 2 – 3 years tops.

    • lprent 1.2
      26 May 2009 at 3:39 pm

      Different scale. Factor in the GIS data held in what will probably be incompatible systems.

    • ghostwhowalks 1.3
      26 May 2009 at 4:02 pm

      8 years ! That means whatever was bought in next year would itself be ready to be replaced

  2. infused 2
    26 May 2009 at 3:20 pm

    It will be a big operation. I bet each council has a completely different system. Different sql database schema etc.

    8 Years does sound way to long though. Seems like someone trying to make some headlines. Most integration is 2-3 years tops. Sounds like they need a better firm to take over.

    If you read they are talking about their internal IT team. This is something you’d out source.

    • lprent 2.1
      26 May 2009 at 3:38 pm

      We’re talking here about very large amounts of accumulated data in accreted systems from multiple different organisations. In particular the GIS components will have enormous amounts of data.

      I think you’re underestimating the scale of the project. The best analogy is something probably like banks. It takes them about a decade to sort their systems after a merger. Most of the time they just plaster over old systems and data sets with glue code.

      • ghostwhowalks 2.1.1
        26 May 2009 at 4:04 pm

        The GIS components are most likely all standard format anyway.
        I understand that Auckland City already runs the regional LIDAR topographical component of the GIS

        • lprent 2.1.1.1
          26 May 2009 at 5:49 pm

          I was more thinking of the data that the GIS is in. All of those probably incompatible formats for where drains and sewers are. I will bet that each council has a different system depending on when they digitized. Plus the hundreds of other systems – like dog licenses etc.

          The councils act as the repository for all local info. It takes eons for merging fossilized info like that.

      • Clarke 2.1.2
        26 May 2009 at 4:12 pm

        I’m with lprent on this one … and one of the key reasons is that Councils are expected to retain all of the data they collect. Commercial organisations at least have the luxury of being able to decommission data sets after a certain period of time, but we expect to be able to go back to rates records since the land title was first created.

        The complexity won’t come from integrating business processes – it’s come from the chaos of so many different data types and formats. And if anyone is about to suggest not migrating everything and simply gluing the systems together (technically attractive though that may be), you can pretty much kiss goodbye to any operational cost savings.

  3. IrishBill 3
    26 May 2009 at 4:07 pm

    One word: “INCIS” (well it’s an acronym rather than a word but you get the point.)

  4. Daveski 4
    26 May 2009 at 4:18 pm

    In defence of some objectivity, these are the obvious types of issues that would have occurred regardless. You can’t blame National for the implementation costs and I must admit I was surprised this issue hadn’t been picked up earlier.

    On top of all the systems integration issues, there will be the need for significant training etc. Let’s not forget also that there will be major exercises in creating intranets and extranets let alone all the efforts that have been made by the individual councils to meet the PRA obligations.

    • mickysavage 4.1
      26 May 2009 at 5:32 pm

      Of course National cannot be blamed for this. But it makes you scratch your head about their insisting that the merger be done and dusted so that the next election can be under the new system.

  5. infused 5
    26 May 2009 at 4:23 pm

    Yeah, well I have no idea. No idea how the councils work. I did tender for their work some years ago, but they went with Gen-I 😛

    My biggest integration task was with two medical companies, merging a dos based system to a current web based system. This is within the last two years as well believe it or not. In to the second year now and I think there is around about a year to go.

    The biggest challenge was the data types. So much information in poorly laid out database.

  6. Zaphod Beeblebrox 6
    26 May 2009 at 4:37 pm

    Don’t uderestimate the human factors here. Councils have a huge amount of data running about in the heads of their staff- institutional knowledge. Remember knowledge is power, public servants know this better than anyone so there is unlikely to be a manual describing where to find everything. If we are going make some of these people redundant, some will retire some others will go to work elsewhere, you can guarantee that there will be huge inefficiencies as clients and ratepayers call up asking about how their project of permit or informal arrangement which has been going on for years is going which noone knows of etc, then they say talk to employee X he/she knows all about it.
    I would not under estimate amount of work that will need to be done.

  7. Zetetic 7
    26 May 2009 at 5:43 pm

    oops.
    Had wrong byline.
    No angry reaction from guest poster.
    Sweet.

  8. Lindsey 8
    26 May 2009 at 5:47 pm

    The GIS won’t be so much of a problem, it is all the internal data systems. One Council I know has one system for data storage for internal and external mail and another for case management. And the two do not talk to each other!

  9. Akldnut 9
    26 May 2009 at 6:48 pm

    “Mr Hitch says there are about 300 IT staff across the eight councils and this number could increase as the merger progresses.”

    Woohoo they’re finally going to create some jobs instead of slashing them, I bet this will be one of their major boasting points for the next year or so.

    Supercity – ? (definately one or two Jobs) this number could increase
    Cycleway – 0

  10. Rich 10
    26 May 2009 at 7:29 pm

    As an IT professional, I don’t reckon there *are* economies of scale in moving to larger systems. The skills and attitudes to run such things properly don’t really exist in NZ, and they usually wind up as an unresponsive, bureaucratic mess

  11. Daz 11
    26 May 2009 at 9:21 pm

    This is a very large and complex integration, consolidation and migration of IT infrastructure and services on a scale most in NZ would have not dealt with. I have been fortunate to have been a exposed to a number of such complex situations and the foremost part of any of this type of work is excellent business and project planning upfront, with that said there needs to be a Project Management Office (PMO) setup to undertake this work independent and separate from the current entities. So they can review each city regional IT infrastructure and software, backup disaster recovery solutions, decide on best practice, across the board and make recommendations and costings around the work to be done. The work needs to be broken down in to streams of City Councils and then the various services. There needs to be a prouction and disaster recovery data centre for housing all this infrastructure and current facilities need to be investigated. It needs to be investigated if it is more economical to outsource the whole IT infrastructure or keep it inhouse these costings need to be evaluated to decide what is the most economical use of tax and rate payers money.
    The work can be delivered in a 4 year period on agressive schedule if the project management office is setup correctly and has the funds available to proceed immediately. But more realistically I would say 5 years been very achievable, and I have dealt with huge bank mergers and the after effects, provided technology road maps and technical documents on these types of solutions. There needs to be an Enterprise Architect engaged to ensure the soluton takes into account all current solutions, each service industry IT best practice and that a Solution Architect is enaged for each of these service industries whom is a specialist whom reports into the Enterprise Architect. I would also see the PMO also be broken down by Councils and then by serice industry with a very complex but quite managable large team working on this, there may be upto 300 addtional staff brought in as contractors during the 5 year period to deliver in this time frame but only a few will actually be retained after the project is completed the remainder of current council / service industry IT staff will take over / be retrained on new systems, with obviosly some staff made redundant due to economies of scale achieved, requiring less staff.

  12. rainman 12
    26 May 2009 at 10:56 pm

    I used to work in IT for one of the councils. There are solid technical and non-technical reasons why this is a complex job and will cost lots of time, effort and ratepayers money. The Rodney will have little concern for these as they don’t fit his ideology – by pushing this despite his earlier rhetoric he has revealed himself to be nothing but a common hypocrite.

    Ah well, hopefully I can land myself some of the contract work!

    I actually agree that some aspects of local government could profitably be centralised, but this gung-ho approach is an incipient disaster, The Nats will be long voted out of office before the dust settles on this mess,

    • Zaphod Beeblebrox 12.1
      27 May 2009 at 1:36 pm

      Maybe it can be raised in the budget- I assume we will need to import a lot of the components.